As Party City stores close for good, these brands may take their place

Party City is shutting down its operations completely after 40 years, but a few of its major competitors are attempting to supplant them in the discount store space. 

Stores that could replace Party City

Five Below and Dollar Tree have emerged as possible replacements for Party City, which is attempting to secure deals with both companies, Fast Company reported, citing documents submitted to a bankruptcy court in the Southern District of Texas. 

Big picture view:

 Five Below’s proposed deal would include 44 stores in exchange for a $2 million upfront payment with an extra $70,000 for each lease agreement signed after 29 leases, according to documents submitted on February 19 to the Southern District of Texas. 

Dollar Tree’s proposed deal provided to the court on Feb. 21 includes 148 stores for a $1 million upfront payment, with an additional $65,000 for each lease agreement beyond 10 leases. 

Why is Party City closing?

The backstory:

Party City filed for bankruptcy in 2023 and 2024 before the company announced last year that it could not recover its financial losses. 

The retailer, which had more than 700 company-owned and franchised stores, completed its Chapter 11 bankruptcy process in 2024 eliminating almost $1 billion in debt. 

RELATED: Party City closing after 40 years in business

However, troubles related to inflation, debt and other factors reportedly hurt the organization.  In December 2024, Party City corporate employees lost their jobs, and the company was eyeing widespread store closures at the beginning of February 2025. 

Last year, Party City CEO Barry Litwin said it was "necessary to commence a wind down process immediately" for the party supplies retailer, CNN reported in December 2024, citing comments from a Party City conference call with its corporate workers.

What other retailers are closing stores in 2025?

Local perspective:

Party City is among a number of retailers that are closing their doors this year. 

Other stores include Joann, which reportedly plans to close 500 stores nationwide as part of its ongoing bankruptcy restructuring. 

RELATED: Here are the stores that are closing in 2025

Volcom, Billabong, and Quicksilver are closing more than 100 stores nationwide after Liberated Brands filed for Chapter 11 bankruptcy. 

JCPenney is closing stores by the middle of the year, while Macy's is closing 66 stores this year to revive its struggling business, the department store said in January. The retailer announced plans to close approximately 150 "underproductive stores" through 2026.